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Stock picks by the pros
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March 17, 2000: 1:54 p.m. ET
MCI WorldCom, Computer Associates, AIG, and Jet Blue head the short list
By Staff Writer Tatiana Helenius
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NEW YORK (CNNfn) - Money managers and analysts named several retail, pharmaceutical, and technology stocks among their top picks this Friday.
A U.S. airline and an advertising boutique were also mentioned.
Here are some comments on the stocks that recent guests on CNNfn are buying - and why:
A portfolio crammed solely with "old economy" stocks is "a very stodgy position to have," said Michael Farr, president of Farr, Miller & Washington. "I still think you have to own tech stocks, no question about it, but there are tech stocks and tech stocks: There are tech stocks without earnings that are just the concept stocks and tech stocks with solid earnings behind them."
 "One tech stock that has really not done much is MCI WorldCom (WCOM: Research, Estimates). I think that WorldCom is a great company. It's a huge telecom company; they have cobbled together a number of different companies through acquisitions, and their numbers are strong. And WorldCom is something like 30 percent off its highs. I think it's a core holding."
 "Eli Lilly (LLY: Research, Estimates) is a company I mention frequently," said Farr. "It is also down 20 or 30 percent; all the pharmaceuticals are. I like Lilly, and I like what Lilly is doing with this new Prozac medication that's going to be taken on a weekly basis instead of on a daily basis; it seems like they are trying to reinvent parts of their product lines."
Financial services company AIG (AIG: Research, Estimates) is Farr's last pick. "You know, the pharmaceuticals and the financials have really underperformed, and I think that AIG is probably the blue-chip insurance company out there. The stock is well off its highs and the company growth is strong," he said.
 Discount carrier Jet Blue is "trying to go for a new niche that hasn't been explored before, using Kennedy Airport as a domestic airport," said Raymond Neidl, airline analyst, ING Baring Furman Selz. "It's not that they're coming into the big city airports, it's just that there was a lot of availability during the day that they took advantage of." However, despite Jet Blue's entry into the domestic market, said Neidl, "I think the Southwest (LUV: Research, Estimates) model is still intact, they also utilize under-served airports."
 "We've been trying to look at things with some safety," said Ron Hill, equity partner, Brown Brothers Harriman, discussing recent market highs. "We've been concerned that this market is starting to get overheated, and the Fed, by tightening interest rates, will be draining money away from the markets eventually. The strong economy, too, is also draining money away from financial investments. So we've been looking for things like Computer Associates (CA: Research, Estimates), which is a less
expensive sort of technology stock, and Apple Computer (AAPL: Research, Estimates) or EDS (EDS: Research, Estimates), for example.
Hill is also "looking back at the pharmaceuticals again, Bristol-Myers Squibb (BMY: Research, Estimates), for example, which was hit badly on that they were going to lose their cancer drug, to generic competition."
 "Finally, in the retail sector, Best Buy (BBY: Research, Estimates) which did have a monster day yesterday. Electronics retailers are the place to be in retail. And keep an eye on Borders Group (BGP: Research, Estimates), it's announced that they're looking for strategic alternatives here; maybe a purchase by Amazon.com (AMZN: Research, Estimates); who knows; but this stock was recently trading around $17 and change - it probably has a value of maybe $25-to-$28."
Tom Galvin, chief investment officer, Donaldson Lufkin Jenrette, brought with him a handful of picks, "some representing the new economy and some 'old economy' stocks. In the 'new economy' [sector], I think FreeMarkets (FMKT: Research, Estimates) is worth investigating; it's providing an exchange through which business-to-business commerce can take place," he said. "Companies using FreeMarkets products can draw down their cost structure, take inefficiencies out of the system, pass those on to the consumer in the form of lower prices, ultimately, and help margins for manufacturers."
 "In addition," said Galvin, "I think Compaq Computer (CPQ: Research, Estimates) has been a beaten down stock. We think this is their last poor quarter, and that going forward, we'll see increases in earnings per share. Looking at the old economy, I think like a stock like Circuit City (CC: Research, Estimates) is benefiting from the digitalization of electronics right now. That area is seeing spectacular growth. The stock's down almost 10 percent from its highs, and it is well worth buying."
 'Pros' bonus: Hear commentary on hot sectors from Tom Galvin, chief investment officer, Donaldson Lufkin Jenrette. Select: [298KB WAV] or [298KB AIFF]
"Lastly," Galvin said, investors might want to look at "Omnicom Group (OMC: Research, Estimates) on the advertising side, as wee see the .com companies spending for their survival. Overall advertising trends being exceptionally strong. And that stock also has come down a lot this year. I think people should really move back into it."
The views presented here are solely those of the analysts quoted. They do
not represent the opinions of CNNfn on whether to buy or sell shares of a
particular stock. 
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